The Musafir Thesis
Problem: Fractured Cross-chain User Experience
Problem: Fractured Cross-chain User Experience
Ethereum was launched in 2015 and has revolutionized the crypto space. With the introduction of Turing-complete virtual machine (EVM), anyone could build any application that takes advantage of Ethereum’s immutability and trustless. This was a 10x leap from what we had before in the form of Bitcoin and related blockchains which were severely limited in their capability and could only support one cryptocurrency. However somewhere around 2017/2018 with the Cambrian explosion of new DeFi primitives, users and developers alike realized the inherent limitations of Ethereum, and plans were made to move to a mult-chain world which we now call the modular blockchain vision.
For the past few years, we have seen dozens of new chains (L2s) that rely on Ethereum for their security and offer computation using cryptoeconomic guarantees via fraud and validity proofs. Data availability services also popped up promising to further reduce the stress on the Ethereum mainnet by offering cheap space to store transaction data. Ethereum and its community are fast moving towards a rollup-centric modular blockchain world.
Limitations of Modular Blockchains
From Ethereum’s point of view, it made sense to move towards a modular architecture as decentralization and trustlessness have always been the main values that the community has strived to uphold. But it has led to the fracturing of user experience. Users need to keep track of their assets on multiple chains and have to go through the hassle of bridging which would not be any issues if Ethereum was one unified blockchain.
To some degree, people have accepted that perfect composability in Ethereum will never be possible, and major protocols need to be on multiple L2s to support the ecosystem there. Nearly all DeFi would naturally get deployed wherever the major protocols are like Maker and Uniswap. The cost of using Ethereum mainnet will be much higher than the new suburban L2s, which is fine as many applications work fine on an isolated L2.
Current Interoperability Landscape
The early era of interchain bridges was fraught with hacks and inefficient designs. Most solutions were centralized and had a single point of failure. However, bridges have since evolved. A recent example of a better interoperability solution is Wormhole. Wormhole provides a communication layer between chains, on top of which traditional token bridges can also be built. Instead of a centralized entity signing and relaying the transactions, Wormhole employs a group of validators called guardians who independently observe and sign transactions that are then relayed to the destination chain. Although decentralized, this approach is not ideal because the validator set is selected manually but acceptable, as the validator set consists of known individuals/groups from DeFi.
DeFi is arguably the biggest use case of web3, and Musafir is initially designed as a DeFi-first solution. Our design is biased towards interchain token transfers, and we will discuss the design guide for protocols building on top with examples, believing that most applications can be built using this structure.
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